Iran’s foreign trade from the fiscal 1997-98 to 2020-21 stood at 2.25 billion tons worth $1,714 billion, according to the Islamic Republic of Iran Customs Administration’s spokesperson.
Imports accounted for 830.41 million tons worth $947.41 billion while exports stood at 1.42 billion tons worth $767.52 billion.
“Attention to foreign trade, especially non-oil exports, began in the years after the Iran-Iraq War. However, statistics confirm that whenever oil sales rose in terms of volume and value, it also affected non-oil trade,” Rouhollah Latifi was also quoted as saying by IRIB News.
From the fiscal 1997-98 to 2000-01, foreign trade hit 141.41 million tons worth $69.77 billion, of which non-oil exports stood at 55 million tons worth $13.1 billion and imports constituted 86.41 million tons worth $56.67 billion.
Foreign trade registered growth from the fiscal 2001-02 to 2004-05 and stood at 182 million tons worth $124 billion. Export’s share was 63.1 million tons worth $21.65 billion and import’s share was 119 million tons worth $102.38 billion.
From the fiscal 2005-06 to 2008-09, total trade experienced noticeable growth and hit 439.22 million tons worth $368.64 billion, of which imports accounted for 164.8 million tons worth $185.45 billion and non-oil exports stood at 118 million tons worth $133.75 billion.
Iran’s total trade from the fiscal 2009-10 to 2012-13 stood at 439.22 million tons worth $368.64 billion, of which 264.22 tons worth $133.75 billion belonged to non-oil exports and imports reached 175 million tons worth $234.89 billion.
The highest volume of imports in terms of weight was registered in the fiscal 2009-10 in the 24-year period under review with 51.9 million tons and the highest value of imports belonged to the fiscal 2010-11 with $64.45 billion.
Trade from the fiscal 2013-14 to 2016-17 hit 563.75 million tons worth $367.84 billion. Exports accounted for 41.8 million tons worth $179.34 billion and imports accounted for 145.25 million tons worth $188.5 billion. The highest value of non-oil exports in the period belonged to the fiscal 2014-15 with $50.56 billion.
From the fiscal 2017-18 to 2020-21, foreign trade stood at 640 million tons worth $348.78 billion. Exports’ share hit 500 million tons worth $167.65 billion and imports stood at 140 million tons worth $180.13 billion. The highest volume of exports in terms of weight belonged to the fiscal 2018-19 with 135 million tons.
“In the last 24 years, due to dependence on oil sales and the political and international conditions of the country, trade balance has been negative, except in the fiscal 2018-19 with 1.5 billion and in the fiscal 2015-16 with $890 million,” Latifi said.
Regarding the value of imported and exported goods, the IRICA spokesman said that in recent years, each kilogram of exported goods averaged 30 to 38 cents, and the highest amount was in the fiscal 2011-12 with 56 cents.
“The highest average value of imports per kilogram in the last 24 years dates back to the fiscal 2011-12 with $1.61. The lowest value of exports dates back to the fiscal 1999-20 with 19 cents per kilogram and in terms of imports, the lowest value of 55 cents per kilogram dates back to 2000-01,” he said.
“Since 1997-98, Iran’s foreign trade has grown significantly. With greater attention to domestic capacity and production of more value-added goods and focus on exports of non-oil goods to the region and other countries, exports can reach $100 billion annually. This figure, however, is only 10% of the imports of our neighboring countries.”
Latifi noted that gas condensate exports were added to the non-oil exports’ statistics since the fiscal 2014-15.
Reversal of Fortune
Latest data released by the Islamic Republic of Iran Customs Administration show that the first two months of the current Iranian year (started March 21) saw a reversal of fortune from last year’s decline in foreign trade.
Iran’s foreign trade reached 22.2 million tons worth $12.8 billion in the month leading to May 21, indicating a 6.6% and 38% growth in weight and value respectively compared with the same period of last year, Mehdi Mirashrafi, the head of the Islamic Republic of Iran Customs Administration, said.
“A total of 16.9 million tons of non-oil goods worth $6.3 billion were exported. Gasoline, polyethylene, methanol, steel ingot and other steel products were Iran’s main exports during the one-month period [April 21-May 20],” he was quoted as saying by ISNA.
Exports increased by 17% in terms of weight and 48% in terms of value year-on-year. Top export destinations during the month under review were China with 4.6 million tons of non-oil goods worth $2 billion (up 17% in tonnage and 74% in value YOY), Iraq with 3.1 million tons worth $953 million (down 18% in weight and 13% in value), the UAE with 2.4 million tons worth $849 million (up 9% in weight and 25% in value), Turkey with 384,000 tons worth $388 million (up 14% in weight and 172% in value) and Afghanistan with 911,000 tons worth $365 million, indicating a decline of 14% in weight but an 8% increase in value.
Mirashrafi noted that exports to these five countries amounted to 11.5 million tons of non-oil goods worth $4.6 billion and accounted for 68% and 73% of Iran’s overall exports in terms of weight and value, respectively.
“Imports reached 5.3 million tons worth $6.5 billion, indicating a 16.5% decline in weight but a 29.5% growth in value compared with the corresponding period of last year,” he said.
“Cellphones, corn, sunflower oil, soybean meal, wheat, soybeans, rice, barley, sugar and unprocessed soybean oil were Iran’s main imports last month. Imports of these 10 items totaled 3.7 million tons worth $2.1 billion and accounted from 69.5% and 33% of the country’s overall imports in terms of weight and value, respectively.”
The IRICA chief added that top exporters to Iran were the UAE with 1.4 million tons of goods with $1.8 billion, China with 461,000 tons of goods worth $1.5 billion, Turkey with 581,000 tons of goods worth $642 million, Germany with 156,000 tons of goods worth $285 million and Switzerland with 359,000 tons of goods worth $283 million.
“Imports from the UAE rose by 114% and 181% in weight and value respectively compared with last year’s same month while imports from Turkey decreased by 48% in weight and 42% in value, imports from Germany dropped by 54% and 15% in weight and value, and imports from Switzerland surged by 2,642% in weight and 2,061% in value compared with the same month of last year,” he said.
“These five countries exported an aggregate of 2.96 million tons of goods worth $4.54 billion to Iran during the month under review to account for 55% of the country’s overall imports in weight and 70% of its imports in value.”
Mirashrafi further said a total of 1.84 million tons of cargo were transited across the country during the second month of the current year, indicating a 142% increase YOY.
Iran’s non-oil foreign trade in the first month of the current Iranian year (March 21-April 20) stood at 10.34 million tons worth $5.76 billion, indicating an increase of 32% and 62.5% respectively in weight and value compared with the corresponding period of last year.
According to IRICA, exports accounted for 8.3 million tons worth $2.96 billion and imports constituted 2.04 million tons worth $2.79 billion of the total sum.
Exports show an increase of 56% in weight and 80% in value while imports registered a decline of 18% in weight but an increase of 47% in value year-on-year.
Iran’s foreign non-oil trade stood at 145.7 million tons worth $73 billion in the last fiscal year (March 2020-21).
According to Mirashrafi, exports accounted for 112 million tons worth $34.52 billion and imports constituted 34.4 million tons worth $38.5 billion of the sum.
“Iran’s foreign trade reduced by 25 million tons due to sanctions and the Covid-19 pandemic,” he sa8d, adding that the country’s trade deficit stood at $4 billion.
TPO on Fiscal 2020-21 Decline
There were four main reasons behind the decrease in Iran’s foreign trade in the fiscal 2020-21 compared with the years ranging from the fiscal 2011-12 to 2013-14, according to the Trade Promotion Organization of Iran.
The first reason behind the decrease was the decline in oil revenues. Parts of raw material costs are supplied through oil revenues. The decline in revenues caused problems in the way of foreign exchange earnings and buying raw materials for export products. Therefore, it caused a decline in volume of exports in the period.
Currency shock is another reason behind the decline. One of the main variables affected by currency shocks is non-oil exports.
Iran’s currency market faced an unpredictable shock in the fiscal 2020-21 due to the intensification of US sanctions, the decrease in foreign exchange reserves and the Covid-19 pandemic. Alongside these problems, the Central Bank of Iran’s forex earnings law made some exporters unable to meet the CBI requirements, so they stopped exporting their products and waited for stability in the currency market and forex laws.
The US put sanctions on petrochemical industries and 39 related institutions, and Department of Treasury banned transactions, purchases, credit and insurance services to Iran by other countries. Oil prices also impact petrochemical exports and due to the low oil prices in fiscal 2020-21 alongside the US sanctions, petrochemical products registered a decline in the period under review.
The coronavirus pandemic was another reason behind the significant decrease in trade. Closure of borders, new standards for foreign trade and restraint by other countries in importing products, especially for agricultural and food products, caused a decline in Iran’s foreign trade.
Iran and the US are holding indirect negotiations on a return to compliance to the 2015 Iran nuclear deal, formally known as Joint Comprehensive Plan of Action.
Representatives of Britain, China, France, Germany, Russia and European Union are shuttling between US and Iranian delegations. JCPOA limited the scope of Iran's nuclear program. In return, the Islamic Republic received relief from US and international sanctions.
However, Washington walked out of the deal under the administration of former president, Donald Trump.
With a likely agreement between the two countries and lifting of sanctions, some of these obstacles such as the US sanctions may be removed and there is an opportunity for Iran to develop and increase its foreign trade.
